Tebow-Mania is Everywhere, Including Federal Court

Love it or hate it, Tebow-Mania is invading New York. Quarterback Tim Tebow, whose popularity soared last year as he led the Denver Broncos on an improbable run from a 1 and 4 record to a playoff win over the Steelers, was traded to the New York Jets on March 21, 2012.

Within days of the trade, Reebok, a unit of Adidas AG, began selling Jets Jerseys and t-shirts with Tebow’s name and number. This caught the attention of Nike Inc., who promptly filed suit against Reebok, seeking to enjoin them from distributing the apparel. The suit, filed in the Southern District of New York, alleged violations of the Lanham act and misappropriation of rights of publicity among the causes of action. In the complaint, Nike argued that “Tebow’s trade to the New york Jets, coupled with the franchise’s location within the NFL’s largest market and the nation’s media center, has created enormous demand for Tebow-identified New York Jets Apparel. Reebok has sought to take advantage of this unique short-lived opportunity by supplying, without authorization or license, Tebow-identified New York Jets apparel. . . .” On March 29th, one day after Nike’s filing, the court issued a temporary restraining order requiring Reebok to stop selling Jets-Tebow items.

The trade and dispute arose during a time of transition in the NFL: Reebok’s ten year license to sell NFL player-themed apparel expired on March 1st. Meanwhile Nike took over supplying NFL gear when its new five year license began on April 1st. During the transition, Reebok would be allowed to sell existing supplies of player-related items, but would not be able to produce new ones.

During arguments, Reebok argued that it should be able to place Tebow’s name and number on its existing supply of blank Jets attire. Nevertheless, on April 4th, Judge P. Kevin Castel extended the initial injunction, stating that allowing Reebok to sell Tebow items interfered with Nike’s “opportunity to associate itself” with Tebow.

On April 10th Reebok and Nike settled, with Reebok giving up its effort to sell Jets-Tebow apparel and agreeing to buy back apparel that had already been shipped. Nike’s new Jets-Tebow jerseys won’t be available till April 26th (but can be pre-ordered here).

Tebow fans: Are you upset that you have to wait to get your new Tebow Jerseys? Do you think Mark Sanchez has ordered one? What week do you think Tebow takes over the starting job?

7 Responses to Tebow-Mania is Everywhere, Including Federal Court

I don’t see why the transition agreement could not have been drafted in a better way in order to allow at least one of the two companies to produce jerseys for players that have been traded. It seems very inefficient for both brands to have an entire month of transition without either of them having the rights to capitalize on demand when its at its peak; this is obviously at the beginning of free agency. This applies, not just to Tebow, but Manning, and a host of other players. This could have been avoided by drafting a better agreement.

I’m very surprised that Reebok thought it would be able to get away with this. Reebok would clearly still be producing a new product if it added Tebow’s name to existing blank jerseys. I can only assume that Reebok hoped to make enough short term profits that it still made money off the incident as a whole. Ultimately, I think Reebok had to know that it would not be allowed to continue selling the Tebow jerseys long term.

If anything, the fact that the settlement was so obviously in Nike’s favor indicates how weak Reebok’s argument was.

Also, interestingly enough, the settlement did mention that Reebok was considering expanding their practice to handle recently traded players like Peyton Manning as well. I would think, however, Reebok could put Sanchez’ name on the blank jerseys and if that is actually a ‘new product’ considering I’m sure they sold Reebok jerseys in the past. Although, if they do that then maybe that’s creating new product, though I’m not sure if Nike would want to or be able to prove it as such.

And as far as Tebow taking over, there are going to be calls for that as soon as Sanchez has two mediocre games in a row and who knows what Rex is going to do.

I agree, Reebok’s defense sounds pretty far-fetched. It would make the NFL’s exclusive license meaningless. By that logic, why not just overstock your merchandise by thousands of jerseys just before your contract expires, and then continue selling them for years?

I am interested to know whether Reebok legitimately thought that adding a name to a blank jersey was not actually creating a new product. Jerseys with names and jerseys without names are certainly distinct. As a result of the injunction, Reebok will likely end up with a warehouse full of blank Jets uniforms. On the other hand, Reebok should have predicted it would be unable to sell the Jets jerseys after its license expired on March 1st. Instead of trying to liquidate the blank jerseys by adding Tebow’s name in violation of the rules set forth in the transition agreement, Reebok should have cut production earlier. Also, Tebow will not take over the starting job unless Sanchez gets hurt.

What an odd scenario. I wonder what the standard practice is in the industry. Do they normally have large amounts of jerseys without names or numbers yet attached? Nike presumably doesn’t object to Reebok adding Sanchez’s name or number to blank jerseys.

Yeah, I guess the question is whether it’s adding any name at all that makes a jersey a new product or adding Tebow’s name when he was not previously a Jet. Ryan (below) seems to think that a Jets #6 jersey is distinct from a Sanchez jersey, but this clearly is not as distinct as creating a Tebow jersey when he’s just a brand new Jet, and the question of whether Reebok would be producing a new product by slapping Mark’s name on–while not the point here–is interesting to think about.